Budget workshop agenda special session of the City Commission City of Kissimmee on today's day, August twenty-fifth, starting now at five thirty introductions.

Good evening, and uh thank you again for uh your time today.

Um having our first two budget workshops, we were able to narrow down uh the things that we needed to do in order to balance the budget, and I'm pleased to present to you today a balanced budget request that does very minimal damage in terms of significant cuts in order to balance and does not ask the commission to increase any revenue streams in order to balance either.

But the good news is through the hard work of the departments and the finance and budget team, we were able to get to a place that we're able to propel the city forward in meeting your objectives as a commission and pursuing those initiatives and projects that are important to move the city forward while at the same time ensuring that the city budget is well within the means of our revenue streams that are before us.

This year we propose a budget that maintains a millage of 4.6253 for the 18th year in a row.

What you will see is that the total proposed budget is almost 322 million dollars, and what we had adopted last year was 310 million dollars.

But the real story lies in the general fund, and that's where we see the biggest issues.

General fund, as you know, is funded about a third in by property taxes, about 50% through utility revenues from KUA and Toho Water Authority, and then the remainder of funding comes from various sources, including service charges, state distributions, utility taxes, franchise fees.

And

what you'll see with the general fund is that we actually are decreasing the total general fund from last year by around a percent.

The good news is we project at the end of this upcoming budget year and at the end of 2027, we'll be able to maintain a 31% reserve, even though we are projecting to dip into those reserves by about $5 million for this upcoming budget year in order to help us balance.

So it's actually less.

I think the last workshop we had proposed around an $8 million dip into reserves, and we were able to reduce that through a number of measures and as well.

We we we saw um revenues that look like they were a little bit better than we originally had forecasted.

So this budget where it does become a little painful is is that we do not propose any new positions for fiscal year 2027.

And in lieu of to the best that we can we can afford to do this, in lieu of doing any position elimination, we're gonna try our best to carry forward with a with a hiring freeze through the fiscal year, say for those positions that are critical in nature.

Um if we can keep approximately 20 to 25 of those positions vacant from general fund for the year, we should be able to avoid dipping into the reserve any further.

In addition, we have what we've done with this budget is um in with regard to personnel is we have proposed a 3% raise for our workforce.

Uh that does not include the police collective bargaining team,

uh,

which we're in the process of negotiating, and likely that will be a higher increase in order to keep pace with the salaries that the sheriff and uh St.

Cloud are negotiating at this

time.

This budget also takes all of our capital expenditures out of general fund and places it within the sales tax fund.

That was necessary because of the flat revenues that we're seeing that are feeding the general fund itself.

And because of that, uh there will be several projects that we won't be able to pursue this upcoming year.

But the good news is those projects that were part of the commission's priorities will continue to move forward as well as those critical projects that we feel are necessary in order to mitigate things like stormwater issues and flooding, um, as well as um traffic signal and safety issues and resurfacing for uh the city, which we've been able to do a real good job over the last year and a half in uh paving 49 miles of of um repaving 49 miles of of streets.

With that, I'm going to uh turn over the the floor to uh finance director Tavia Ritchie, who will give you a little bit more in-depth overview of the budget, and then uh following that uh we will go through uh each of the department's pages at the at the pleasure of the commission.

Good evening, Madam Mayor, commissioners.

Uh the GFOA did a survey of over 1,100 finance professionals across the nation on the biggest challenges facing governments that they foresee.

And what you see on the screen are the top answers that they selected.

So you'll see funding revenue pressures, pressures that's related to revenue being less than expenditures lagging behind.

Technology and cybersecurity came in second on the list.

Federal and state uncertainty, just think mandates coming down from federal and the state level, as well as unstable funding streams.

So those grants that you know we've been pursuing, it's unsure whether or not they'll keep coming in to what level.

Staffing and retention, just think turnover, staff retirements and talent shortages, and then inflation and costs.

And that's pretty much what we're seeing here.

And that's why we chose the theme propel, partly driven by a lot of the drivers that you've you've seen on that previous screen.

But we wanted to make sure this budget represented our commitment to turn uncertainty into momentum and to continue moving the city forward.

And

so the city's overall budget for fiscal year 2027 proposed is uh just under $322 million.

That's a 3.6% increase over last year's budget.

Um keep in mind as the budget grows, it may mean that reserves are growing with the budget.

So our $322 million budget does include just over $92 million of reserves.

That's up from the $74 million in reserves that we saw last year.

However, this is spread out across all funds.

So general fund actually stayed flat with our amount of reserves.

The reserve increases are actually concentrated in our mobility fee fund, stormwater, and the building fund.

So

you've seen this slide before, but repetition makes for familiarity.

Um we a couple weeks ago we certified the proposed millage at 4.6253, as Mike said.

That rate is what appeared on Trim notices that went out to uh property owners a couple of weeks ago as well.

So that rate will still keep us in the low percentile of the state, but it'll also now bring in just over 33 million dollars in property taxes for next year.

Now that amount, although it is a 7.7% increase over what we saw in values last year, it still isn't enough to cover the police and fire budgets.

Both of those budgets combined are 70 million dollars.

It would be just enough to cover a fire.

And so with our recommended operating millage rate being 4.6253, the calculation for a rollback rate is is

uh

boils down to actually 4.5144.

So if we were to adopt that, that would be roughly $800,000 less that we would see.